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net.wars: In praise of Gowers

The most surprising thing about the Gowers report (PDF), which was released Wednesday afternoon, is that so much of it is so rational. In fact, so many of its recommendations are good that it seems almost churlish to carp about the few that aren't. Still, that's what we're here for.

First, the good. Gowers' report came down in favour of exceptions for: derivative and transformative works, archives' and libraries' preservation copies, research, distance education, caricature, parody, and pastiche. It recommended creating an exception for limited private copying - format shifting. (As American readers may not know, it's technically illegal in the UK to rip a commercial CD and copy the resulting MP3s to an iPod.) Similarly, it's hard to object to the recommendation that Trading Standards be given the power to crack down on counterfeit CDs at boot sales and so on.

The probably biggest news: Gowers recommended firmly against copyright term extension in sound recordings, against the pleadings of Big Music. The basis for this was largely an economic report (PDF) commissioned specifically for the review that is utterly worth reading for its careful analysis of what facts we have about the economics of older recordings.

Its findings in brief: the costs of term extension to consumers are greater than the benefits to the recording industry.

The economic report invalidates a number of claims made by the record industry.

The impact of term extension on the balance of trade would be negative, because in the biggest two of the 13 countries that have longer terms than the UK does, the US and Australia, UK rightsholders would not be able to benefit under rules known as "comparison of terms". In the US, the world's biggest music market ($12.1 billion in 2004), international imports command only 5 percent of sales. The report carefully derives an estimate of £155 million in "welfare loss" to consumers if term were extended. Finally, this report points out that although the term of copyright in sound recordings is shorter in the UK, recordings are protected by a broader array of rights, so simply comparing term length is misleading.

Most of the patent recommendations seem rational, too; Gowers recommends holding the line on barring patents on discoveries, mathematical methods, pure software, and business methods. This is interesting, as the review also recommends continuing to support the development of the EU community patent, which is widely believed by anti-software patent campaigners to be an attempt to sneak software patents into Europe. Gowers also recommends some measures that sound utterly sensible, such as sending Patent Office staff on short-term placements to university research labs so they are kept up-to-date on new technical developments (and are, therefore, presumably less likely to grant patents for which there is prior art).

What's less certain is what the impact would be of the recommendation that the cost and time involved in obtaining and litigating patents should be lessened. On the one hand, lowering costs and simplifying the legal system would certainly make the patent system more accessible to small businesses. On the other hand, lowering costs will make it cheaper and easier for large businesses, too.

The two recommendations out of 54 that are really worrying are 38, and 39.

Number 38 recommends ensuring that "an effective and dissuasive system of damages" exists for civil IP cases. The concern here is in ensuring that a legal distinction is drawn between commercial and non-commercial copying, something I've been advocating for years. It is extremely clear that commercial counterfeiting, whether physical or digital, where people pay for fake copies, leaches sales from the rightsholders.

Yes, you can argue that someone who buys a DVD for £5 might not buy the same DVD for £25, and that's true - but it's only a matter of time before prices on the officially released DVDs drops, especially with hi-def DVDs coming into release.

It is much less clear if this is true about file-sharing; there is still insufficient research available into how and why people share, and what its impact on the industry really is. If these recommendations are translated into rules that impose huge damages for activity whose actual impact is unknown, this would be a bad thing.

Number 39 recommends creating protocols for sharing user data between ISPs and rightsholders, "to remove and disbar users engaged in 'piracy'." If, it adds, such protocols aren't developed by the end of 2007 the government should consider legislating. Until now, the data protection laws have hampered such sharing. This is where you have to wait to see specific proposals before you can tell whether users' right to privacy is going to be respected or not. It's hard, on the fact of it, to see why rightsholders shouldn't have to go through the same police procedures, culminating in a court order, as anyone else if they want to know who a particular user is. But again: the devil is in the details.

Gowers' recommendations almost all point in the opposite direction to current US trends, and also to much of what industry wants. Will the British government have the guts to adopt them?